Vodacom to acquire Neotel in South Africa
19 May 2014 | Kavit Majithia
South African operator Vodacom Group has reached an agreement to acquire Neotel for approximately $676 million (R 7 billion).
Neotel is majority-owned by Tata Communications and is South Africa’s second-biggest fixed-line phone operator.
Vodacom said that the fee will not include Neotel’s existing debt, which has to be settled before any deal is concluded.
“Effectively, they have to settle the debt. We are not going to take over existing debt,” said Vodacom CEO Shameel Joosub.
The move is intended to give Vodacom access to a large fibre-optic network for high-speed internet, with the company expected to fund the acquisition through cash resources and existing credit facilities.
According to Tata, Vodacom had a net debt of approximately R 4.815 billion as of March-end. Tata presently owns a 67.32% stake in the company.
All parties refused to divulge further details of the deal.
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